By Yinka Kolawole
There was a marginal decline in expansion of the manufacturing sector in September driven largely by weakness in key sub-sectors of the ecosystem occasioned by binding constraints.
This was revealed in the NESG-Stanbic IBTC Business Confidence Monitor (BCM) Index for the Manufacturing sector in September 2025, which signaled that the sector recorded a slowdown but stayed in the expansion region.
The BCM index for the sector dropped to 102.5 points in September from 106.2 points in August 2025.
BCM is a survey-based report which presents information on the current business sentiment within the Nigerian economy and gauges expectations about overall economic activities in the short term, anchored on business managers’ assessment.
It is facilitated by the Nigerian Economic Summit Group (NESG) in association with Stanbic IBTC Bank.
The report stated: “This marginal decline was largely driven by weakness in key sub-sectors such as Food, Beverage and Tobacco, Cement, Plastic and Rubber Products, Wood and Wood Products, Non-Metallic Products, and Pulp, Paper and Paper Products.
“Surveyed manufacturing firms reported persistent instability and unreliability of electricity, which severely disrupts production schedules and reduces the ability to meet customer demand.
“Moreover, the high cost of powering generators with diesel erodes profit margins, while frequent outages force businesses to cut production and slow operations significantly.”
The BCM survey report further said: “At the sub-sectoral level, Food, Beverage and Tobacco, Cement, Plastic and Rubber Products, Wood and Wood Products, Non-Metallic Products, and Pulp, Paper and Paper Products all posted declines, slipping into contraction in September.
“Given that these sub-sectors collectively account for over 75 percent of Nigeria’s manufacturing output, their weaker performance in the month largely explains the sector’s slowed momentum.
“Importantly, manufacturing businesses continue to struggle with high taxation, limited finance, raw material shortages, inadequate electricity, high rents, insecurity, weak infrastructure, and rising costs, all of which collectively undermine expansion, growth, competitiveness, and profitability across the manufacturing sector.”
Similarly, the report noted that the non-manufacturing sector recorded a slight slowdown in performance, with the BCM index falling to 114.5 points from 116.2 in August 2025.
“This month’s performance resumes the trend of reduced business activity in the sector after the initial break in August.
“Heightening levels of business constraints placed many non-manufacturing firms in difficult conditions, with insecurity emerging as one of the most pressing challenges,” the report added.
The non-manufacturing sector comprises crude petroleum, natural gas, oil and gas services, and construction.
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